VDMP Visa might sound like just another acronym, but for merchants, it's a real problem. Once you're enrolled in Visa's Dispute Monitoring Program (VDMP), your business is flagged for having too many chargebacks. That means higher fees, stricter monitoring, and a target on your back. The good news? You can stay off that list with the right prevention tactics.
What Is VDMP Visa?
Visa's Dispute Monitoring Program (VDMP) is designed to penalize merchants with consistently high dispute ratios. Merchants are enrolled once their monthly dispute count hits 100 and the dispute-to-sales ratio goes over 0.9%. That's not hard to hit if you're running a subscription business, sell digital goods, or deal with customers who don't recognize charges.
There are two tiers:
- Early Warning: You're approaching the threshold. Visa gives you a heads-up, but no fines… yet.
- Standard VDMP: You've crossed the line. Visa starts charging fees and expects you to fix the problem.
Once you're on the list, you're stuck dealing with months of monitoring—and it's not easy to get off.
How to Avoid Getting Enrolled in the VDMP Visa
Here's how to stay below the radar and keep your chargeback ratio clean:
1. Use a Recognizable Billing Descriptor
A confusing billing descriptor is one of the fastest ways to get hit with friendly fraud. Make sure the name on your customers' credit card statements matches what they expect. Add your website or product name if needed.
2. Respond Quickly to Customer Service Inquiries
Most customers dispute charges because they feel ignored. Offer fast, visible support through email, chat, and phone. Use auto-replies to confirm you received their message, and follow up quickly with real answers.
3. Issue Refunds Before the Dispute Happens
If a customer is threatening a chargeback, process a refund instead. Once a dispute is filed, it counts against your ratio even if you win. Proactive refunds are the safer move in most cases.
4. Flag Fraud Before It Hits
Set up fraud filters that block suspicious transactions before they go through. Use tools that detect velocity abuse, mismatched billing info, and VPN usage. It's better to lose a sale than rack up chargebacks.
5. Track Your Dispute Rate Weekly
Don't wait until Visa sends a warning. Monitor your chargeback rate in real-time. If you start nearing the threshold, pause risky traffic sources and tighten your filters.
6. Avoid High-Risk MCCs and Ad Sources
Merchants with certain merchant category codes (MCCs) or sketchy ad tactics get hit harder. If your MCC is already high-risk (like 5968 or 5999), stay extra cautious with your traffic. Avoid misleading ads, fake testimonials, or anything that might trigger buyer regret.
7. Keep Clear Terms and Easy Cancellations
Make sure your refund and cancellation policies are visible and fair. If customers can't cancel a subscription easily, they'll go straight to their bank. A simple cancel button can save you hundreds of disputes.
8. Use Dispute Alerts to Catch Problems Early
Services like Ethoca and Verifi send alerts before the bank files a dispute. If you refund the transaction quickly, it won't count toward your VDMP total. This only works if you're set up with alerts in advance.
Final Takeaway
Getting enrolled in VDMP Visa can wreck your merchant account and add months of stress. But the warning signs are always there if you know what to watch for. Use smart billing descriptors, refund before a dispute hits, and monitor your dispute rate like a hawk. Chargebacks are predictable and avoidable if you take the right steps early.
FAQ: VDMP Visa Explained
What happens if I get enrolled in VDMP Visa?
You'll be placed under Visa's monitoring for at least 4 months. You'll have to reduce your dispute rate below 0.9% to get removed. Visa may also charge penalties based on your volume.
How does Visa calculate the dispute-to-transaction ratio?
Visa divides your monthly number of disputes by the total number of sales for that month. If the ratio exceeds 0.9% and you have over 100 disputes, you qualify for VDMP enrollment.
Is friendly fraud counted in the VDMP dispute total?
Yes. Visa doesn't distinguish between friendly fraud and actual fraud. All chargebacks are counted equally.
Can I get removed from VDMP automatically?
No. You have to reduce your dispute ratio below the threshold for several months. Once you qualify for removal, Visa may take you off the list, but it's not instant.
What's the difference between VDMP and VFMP?
VDMP monitors dispute volume. VFMP (Visa Fraud Monitoring Program) tracks confirmed fraud. Both have similar thresholds and penalties but focus on different issues.
Are certain businesses more likely to get enrolled?
Yes. High-risk categories like supplements, subscriptions, dropshipping, or digital goods are more prone to disputes. These merchants need tighter fraud and chargeback controls.
The Smarter Way to Keep Your Ratios Low
Chargeblast helps merchants reduce chargebacks before they become a problem. With automated dispute alerts, smarter fraud filters, and tools that help you act fast, Chargeblast keeps your dispute rate under control without wrecking your revenue. It's not about fighting every chargeback; it's about preventing them from happening at all.
Want to see how it works? Book a demo today.
